The proposed concept identifies gender as "a person's internal, deeply felt sense of being male or female or something other or in between".

RainbowYOUTH general manager Duncan Matthews, originally from Waikato, said the change was an excellent first step towards being able to gain accurate and representative data about people whose gender identity did not always match the sex they were assigned at birth.

"Indications are that there are many more people than are commonly assumed, with a recent survey indicating 1.2 per cent of high school students actively identify as transgender, with another 2.5 per cent not sure of their gender identity."

Matthews said a majority of recommendations made by the Human Rights Commission inquiry into transgender discrimination had still not been implemented in New Zealand.

The change would help better inform ministerial departments, including both the Ministry of Health and the Ministry of Education, by accurately reflecting the diversity of New Zealand's population.

"Visibility of the number of transgender, intersex, genderqueer people we have in Aotearoa is a first step to having the same rights to access education, health care, services and everything else that allow us to be happy, contributing members of society," Matthews said.

Statistics New Zealand Classification and Standards team manager Jo Allan said it was an important to standardise the way in which gender identity data was captured to ensure all respondents were treated equally.

"A standard way of capturing this information will improve accessibility, meet human rights requirements for data collection and ensure respondents have the same experience when providing information."

Statistics had consulted with the Human Rights Commission to develop definitions for sex, gender, transgender, intersex, and several gender variant identities.

All definitions are listed on the department's website and are at present under a public consultation process.

The proposed changes to gender identity definitions, however, will not include a change to the sex-binary question of female or male in the next census to be held in 2018.

"A review of the statistical standard for sex is out of scope for the current project developing a statistical standard for gender identity," Allan said.

Intersex Awareness New Zealand board member Tom Hamilton said the group would be engaging in the feedback process.